Coca-Cola Europacific Partners and Rabobank launch carbon-cutting supply chain model
18 Aug 2022 --- Coca-Cola Europacific Partners (CCEP), Coca-Cola’s largest European bottler, is launching an environmental sustainability-related supply chain financing program to encourage and reward suppliers to enhance their ESG performance.
The initiative supports CCEP’s goal of cutting greenhouse gas (GHG) emissions across its value chain by 30% by 2030 compared to 2019 levels and achieving a net-zero target set for 2040.
Rabobank will fund the program and it is anticipated that additional banks will join and help the facility develop over time.
Thomas Levin, managing director of Coverage at Rabobank, says “coming up with solutions to help businesses achieve their [environmental] sustainability targets runs to the heart of all of our financing initiatives and Growing a Better World Together strategy.”
The initiative, which is being hailed as one of the first of its type in the international beverage sector, will reward suppliers who enhance environmental sustainability across the board and include sustainability-related KPIs that, if attained, would result in discounts from the initial funding rate.
Ralf Peters, vice president of procurement at CCEP adds that it is crucial that CCEP work together with its suppliers to decarbonize the businesses. He claims the company aims to provide the solutions needed to help reduce emissions, aligned with CCEP’s sustainability goals.
The CCEP program is linked to the net-zero targets set for 2024.Dwindling emissions
“Our new supply chain finance program is another important step that will help us to take collective action – by implementing positive and impactful change and driving continuous sustainability improvements,” Peters says.
Ingredients, packaging, transportation and refrigeration are the company’s primary sources of emissions outside of operations. Therefore, CCEP’s supply chain is responsible for more than 90% of the company’s emissions. Due to this, it has already requested that its suppliers take three steps to significantly reduce their carbon footprint in their organizations.
First, CCEP exhorts suppliers to establish and confirm reduction targets through the Science Based Targets Initiative by 2023.
Next, the company wants to support all of its suppliers in setting goals based on science, making the switch to 100% renewable electricity by 2023, and sharing their carbon footprint information. In order to reduce emissions caused by ingredients and packaging, the company will expedite its plans for environmentally sustainable agriculture and 100% recycled plastics.
Lastly, the initiative will build on this and provide KPIs for suppliers to raise their overall ESG ratings through EcoVadis assessment – a provider of business sustainability ratings.
Program expansion
The program was initially introduced in Germany, and in subsequent phases, it will be made available to the suppliers of CCEP throughout the rest of Europe, Australia and New Zealand.
Additionally, CCEP will collaborate with Rabo Foundation, the bank’s social impact fund, to assist one of its farmer programs in Indonesia that encourages the use of environmentally sustainable farming methods and agricultural inputs in order to boost yields and improve long-term economic viability.
Zwier Smith, director of value chain finance, further adds, “We’re certain that by providing an enhanced sustainability-linked supplier finance program for CCEP we can create a more responsible and sustainable F&B industry that everyone benefits from.”
By Mieke Meintjes
